Audit, Compliance and Risk Blog

On April 2, the US Environmental Protection Agency (EPA) announced that it has completed its “midterm evaluation” of greenhouse gas (GHG) emissions standards for cars and light trucks for model years 2022-2025, has decided to withdraw standards agreed to between the Obama Administration and California during 2016, and will conduct additional rulemaking to consider less stringent standards. This review began in March 2017, soon after President Trump appointed Scott Pruitt as EPA administrator with a mandate to reduce regulation. California, which has special authority under the federal Clean Air Act (CAA), is leading a coalition of states that has already sued to stop the change. In response to this push-back, President Trump has ordered federal agencies to negotiate with California to seek a compromise.

There are no national ergonomics requirements for employers, but California has just expanded its longstanding requirements, to add specific protections for hotel housekeepers. These new requirements complete review and rulemaking triggered in 2012 by a petition by a labor advocacy group, and are consistent with other requirements already administered by the state Division of Occupational Safety and Health (CalOSHA). The state’s efforts are also consistent with general guidance provided US Occupational Safety and Health Administration (OSHA). (OSHA has enforced its General Duty Clause against employers found to have ignored known hazards to their employees, since President Bush signed legislation in 2001 repealing OSHA’s own national ergonomics standard.).

On April 30, the US Environmental Protection Agency (EPA) published a proposed rule (40 CFR part 30) to “strengthen transparency in regulatory science” by requiring the agency to make the data and models used for significant regulatory decisions available for public and peer review. Like most things regarding EPA these days, the proposal has generated significant controversy – based to a large extent to whether the commenter puts more trust in the proposed system and today’s EPA, or in the existing system and yesterday’s EPA. In the remainder of this blog I’ll discuss what’s nominally involved, and possible adjustments to narrow the opportunities for manipulation by tomorrow’s EPA.

The Resource Conservation and Recovery Act (RCRA) assigns the US Environmental Protection Agency (EPA) to define and then regulate “hazardous wastes.” RCRA provides EPA considerable discretion, and one way the agency applies that discretion is by separating hazardous wastes into a variety of categories that are subject to distinct waste management requirements. One basis for these categorizations is relative risk – the more hazardous the waste the greater the controls required, and the smaller the threshold quantities necessary to trigger regulation. Beginning in 1995, EPA has defined a limited set of lower-risk wastes as “universal wastes” subject to special rules intended to encourage recycling (40 CFR part 273). In March 2018, EPA proposed to add aerosol cans. The rest of this note summarizes universal waste requirements, and how EPA is proposing to apply them to aerosol cans.

Automated External Defibrillators (AEDs) are appearing in more and more public spaces and workplaces. These electronic devices are designed to deliver an electric shock to a victim of sudden cardiac arrest, and could save thousands of lives every year:

Because federal anti-discrimination statutes include “sex” discrimination but do not define the term, its interpretation evolves with social and political changes, with policy changes by the Equal Employment Opportunity Commission (EEOC), which administers and enforces Title VII of the Civil Rights Act of 1964 and a variety of subsequent laws, and with court decisions. A major present debate is whether “sex” encompasses “sexual orientation” – which would protect non-heterosexual employees against employment action based on their sexual orientation. On February 26, 2018 the Second Circuit Court of Appeals reversed its own precedent, and decided that homosexual employees are protected.

On April 9, a majority of the Ninth Circuit Court of Appeals ruled that an employer cannot rely on newly-hired employees’ salary histories to justify paying men more than women for the same work. Although the federal Equal Pay Act of 1963 allows disparities based on factors “other than sex,” the court found that salary histories are sufficiently tainted with sex discrimination to bar such reliance. Since it’s taken over 50 years for an appeals court to reach this conclusion, it’s worth exploring the court’s reasoning.

The Securities and Exchange Commission (SEC) has just published Interpretive Guidance to “assist” public companies with evaluation and reporting of their cybersecurity risks. This Guidance expands similar SEC guidance issued in 2011, reflecting the growing importance of the issue and highly-publicized cybersecurity breaches during the intervening years. The following discussion summarizes the new Guidance, and provides context.

On February 12, the Trump Administration issued its budget proposal for federal Fiscal Year (FY) 2019 (October 1, 2018 through September 30, 2019), subtitled “An American Budget”. The proposal included a 34% cut in the Environmental Protection Agency (EPA) budget, from $8.2 billion in FY 2016 (stable in FY 2017 and FY 2018 under a Continuing Budget Resolutions rather than a fully-new federal budget), to $5.4 billion for FY 2019, with corresponding personnel cuts from 15,408 full-time-equivalent employees (FTE) to 12,250. (these are numbers for EPA in the government-wide budget from the Office of Management and Budget (OMB); the stand-alone budget document on EPA’s website cites $6.1 billion).